Aiming “to bring spiritual richness to corporate America”

Spiritual consultants look to bring spiritual practices and approaches to the American workplace:

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In simpler times, divinity schools sent their graduates out to lead congregations or conduct academic research. Now there is a more office-bound calling: the spiritual consultant. Those who have chosen this path have founded agencies — some for-profit, some not — with similar-sounding names: Sacred Design Lab, Ritual Design Lab, Ritualist. They blend the obscure language of the sacred with the also obscure language of management consulting to provide clients with a range of spiritually inflected services, from architecture to employee training to ritual design.

Their larger goal is to soften cruel capitalism, making space for the soul, and to encourage employees to ask if what they are doing is good in a higher sense. Having watched social justice get readily absorbed into corporate culture, they want to see if more American businesses are ready for faith…

Before the pandemic, these agencies got their footing helping companies with design — refining their products, physical spaces and branding. They also consulted on strategy, workflow and staff management. With digital workers stuck at home since March, a new opportunity has emerged. Employers are finding their workers atomized and agitated, and are looking for guidance to bring them back together. Now the sacred consultants are helping to usher in new rituals for shapeless workdays, and trying to give employees routines that are imbued with meaning…

The Sacred Design Lab trio use the language of faith and church to talk about their efforts. They talk about organized religion as a technology for delivering meaning.

Perhaps this is common elsewhere but this strikes me as uniquely American for multiple reasons:

-The interest in unbundling religion and spirituality from traditional religious practices

-Combining spirituality and work. Perhaps this hints the true religion in America is capitalism?

-Assuming there is a common religiosity that can work across a potentially diverse workforce. Kind of like civil religion, which attempts to unite religion and nationalism, but for the office.

-Religion being less about transcendence or encountering the divine and more about pragmatism: helping corporations succeed and individuals find or interact with their soul.

-The entrepreneurial nature of bringing religion to the workplace. This article profiles consultants and firms bringing it in. (It would be interesting to see how this interacts with more top-down approaches from CEOs or other corporate leaders who bring a strong faith or spiritual elements to their practices and aims.)

I will be curious to see (1) what kind of traction this approach gets – does it have staying power? What kinds of spirituality in the office catch on and which do not? – and (2) what the reaction might be among a range of firms and sectors – is this something limited to educated, managerial suites in particular locations?

Local TV market ad celebrities, Bob Rohrman edition

For decades, American television viewers have been treated to (or subjected to, depending on one’s point of view) recurring characters in local television ads. In the Chicago region, Bob Rohrman was a mainstay:

Of all the Chicago auto dealers who ever graced the small screen as their own TV pitchman, few were as delightfully campy as Bob Rohrman.

Rohrman’s low-budget commercials radiated good humor and bad production, featuring his mustachioed and bespectacled face peering out from a variety of goofy costumes, a uniquely awkward delivery and flubbed lines that often devolved into a joyous cackle.

The spots were punctuated by a cheesy cartoon lion and the tag line: “There’s only one Bob ROHRRRR-man!”

Somehow it all worked, turning the Bob Rohrman Auto Group into one of the largest family-owned dealership groups in the Midwest, and its spokesman/founder into something of a Chicago celebrity.

In the era of cable and satellite television, streaming options, declining network television and local radio, and targeted commercials on particular platforms, we may be at the end of local advertising like this. All the advertising then becomes more corporate, slick, tied to national or multinational corporations. And we lose a few public characters who few people may have actually met but who many could recognize.

We purchased a vehicle from a Rohrman dealership several years ago. At no point, did I think about the commercials in that process. But, given the number of Rohrman commercials I have seen and heard over the years, who knows if it influenced me. (I can safely say that other auto pitchmen or dealers, including Max Madsen or the Webb boys, did not lead me to visit their lots.)

New and existing home sales up but…

Recent data shows both increased new and existing home sales:

Sales of new homes in the US soared to their highest level since December 2006 in July as Americans took advantage of historically low interest rates.

Single-family home sales leaped 13.9% to a seasonally adjusted annual rate of 901,000 units, according to data released by the US Census Bureau on Tuesday. Median sales price gained 7.2% to $330,600 from the year-ago period…

The better-than-expected data follows a similarly positive report on existing home sales. Sales of previously owned homes spiked a record 24.7% to a seasonally adjusted rate of 5.86 million last month, according to a Friday release from the National Association of Realtors. Economists anticipated a 5.41 million rate.

Some of this is not a surprise given low interest rates. There is no mention here, but if it is true that significant numbers of city-dwellers are looking elsewhere, that could be driving demand.

At the same time, this is an odd time for increased housing sales. We are in the middle of a pandemic and the uncertainty and unemployment that has brought. Some indicators of the economy are okay but others are less positive.

With that, it is hard to know whether this is more of a blip or a long-term trend. Perhaps this is part of a rebound in homeownership or an odd confluence of factors in an unusual year.

And it would be helpful to have more data. The Census report suggests 61% of the private new homes sold in July 2020 were between $200k and $399k while 29% were over $400k. What kinds of homes are these and where exactly are they located (beyond regions, how about suburbs versus cities?)

Flipping houses stats – up then Great Recession then up then down again – and questions

How many houses have been flipped in the United States in the last fifteen years? Here are some of the stats:

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In the first three months of 2020, 7.5% of homes sold in the United States were flipped, according to a June report from real estate research firm ATTOM Data Solutions. That’s the highest rate since 2006 and a jump from 6.3% at the end of 2019.

Home flipping rates had dropped drastically in 2007 and began to gradually recover in 2010. The number of flipped homes sold in a quarter peaked around 100,000 in 2005, and while it was on the rise in recent years, a decline began in the second quarter of 2019. In the first quarter of 2020, 53,705 single-family homes and condos were flipped, according to the report.

Profit margins have also dropped since 2019, hitting the lowest return-on-investment since 2011. After plummeting with the national economy between 2006 and 2008, profit margins on flipped homes grew at a steady rate until 2017. But since then, return-on-investment has been on a decline.

Still, it’s too soon to fully grasp how the coronavirus pandemic will impact the house flipping market through 2020 and beyond, ATTOM chief product officer Todd Teta said in a statement.

Flipping homes is by now a well-known process due to TV shows and personalities plus its spread throughout the United States. Yet, alongside other phenomena featured on HGTV and among certain groups (such as tiny houses), it can be hard to know how widespread a phenomena is.

Not surprisingly, these stats suggest flipping homes is connected to broader economic conditions: flipping increases when property values are high and repairs to a home can pay off in a sale. When times are tough and property values stagnate or even drop, there is less money to be made in flipping homes.

In the data above, it would be helpful to see how the national trends compare to patterns in particular places. Does flipping work in the hottest markets where prices are already high (limiting who can flip)? What about Rust Belt communities in good and bad times? Suburbs? Urban neighborhoods? I would guess there is a lot of variation across communities.

It is also worth considering what happens to the housing stock in places where flipping does or does not take place. If flipping happens, older housing stock gains new life. If it does not, do these homes simply keep sliding into disrepair?

Finally, this article starts with an example of a family involved in a flipping business but says very little about the role of small flipping businesses or more corporate operations. Even if flipping activity declines during tougher economic times, does it present opportunities for some to buy up properties to flip later? How do the profit margins differ across different kinds of flippers? Are smaller firms or family-owned flippers viewed more favorably by communities than corporate entities?

Filling empty shopping mall space with Amazon

Amazon might be coming to a shopping mall near you:

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The talks have focused on converting stores formerly or currently occupied by J.C. Penney Co. Inc. and Sears Holdings Corp., these people said. The department-store chains have both filed for chapter 11 bankruptcy protection and as part of their plans have been closing dozens of stores across the country. Simon malls have 63 Penney and 11 Sears stores, according to its most recent public filing in May…

Amazon fulfillment centers wouldn’t draw much additional foot traffic to the mall, though some employees could eat and shop at the mall. That is why landlords have preferred to replace department stores with other retailers, gyms, theaters or entertainment operators. Yet many of these tenants are struggling to survive during the pandemic and aren’t in expansion mode.

Simon would likely rent the space at a considerable discount to what it could charge another retailer. Warehouse rents are typically less than $10 a square foot, while restaurant rents can be multiples of that. Depending on when the leases were signed and their locations, department-store rents can be as low as $4 a square foot or as high as $19 a square foot…

Malls’ strategic locations often make them attractive as distribution hubs. Many are near main highways and residences. Amazon has already acquired the sites of some failed malls and converted them to fulfillment centers. FedEx Corp. and DHL International GmbH have done the same.

Dying shopping malls need businesses willing to rent space. But, as the article notes, Amazon is an odd choice: they are partly responsible for the decline of traditional retailers, they may or may not bring in customers for other businesses, and they can ask for lower rental rates. But, what choice do many malls have?

I am trying to imagine former shopping malls that become Amazon centers with more life to them than the typical warehouse setting. The former department stores and other retail spaces can mimic large warehouse spaces while the walkways, fountains and other features, and occasional other tenant provide variety and recreational space for employees. Think tech campuses with a warehouse/shopping mall feel. Or, go further: as shopping malls consider adding residential space, why couldn’t Amazon convert some of the mall space into living quarters for workers? (Perhaps this also lends itself to dystopian visions.)

Not mentioned here: how local governments would like the conversion of retail or restaurant space – good for sales tax revenue – to warehouse space.

Linking storage facilities and McMansions

One billionaire made money on storage facilities and now he hope to profit from McMansions:

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In the depths of the last housing crisis, self-storage billionaire B. Wayne Hughes flew to Las Vegas and Phoenix to lay the groundwork for a new bet. His plan: Buy foreclosed homes, spruce them up and rent them out. He tested his ideas on three houses in each market and then dispatched deputies to buy tends of thousands more across the U.S.

Nine years later the land grab is paying off…

And the rest is behind the paywall. But, the possible connection between these two investments is intriguing:

  1. Both self-storage units and McMansions are relatively recent phenomenon in terms of their scale and regular use.
  2. Americans have a lot of stuff. One answer to having a lot of stuff is to put things in storage. Another solution is to buy a bigger house to put everything in.
  3. Both have architectural quirks. As a kid, I remember more single-story, sprawling self-storage facilities. Now, I see more two to three story buildings – I can think of at least three within 10 miles of my house in built-up suburbia – that look a bit nicer (though are still boxy).
  4. With their architectural quirks, are both of these kinds of structures naked ploys for making money? The McMansion tries to impress and offer as much space as possible for a reasonable price. The self-storage unit facility maximizes the number of storage units and space that can be rented.

Seeking insurance for black swan events

Lloyd’s of London is interested in black swan insurance that would help protect against losses from unusual events:

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Commercial insurance market Lloyd’s has said insurers worldwide will pay out more than $100 billion in coronavirus-related claims this year.

But many firms are frustrated that their business interruption policies do not cover the pandemic and some in Europe and the United States are in dispute with insurers.

The Black Swan cover could be used to ensure payments after catastrophes such as a cyber attack or solar storm destroying critical infrastructure, as well as for pandemics, Lloyd’s said in a report published on Wednesday.

In The Black Swan, Nassim Nicholas Taleb defines black swan events this way:

First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact (unlike the bird). Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable. (xxii)

What phenomena fall into this category? According to Taleb:

Fads, epidemics, fashion, ideas, the emergence of art genres and schools. All follow these Black Swan dynamics. (xxii)

It seems like a conundrum: how exactly to provide insurance monies for events that are unknown and unpredictable? One of the important features of the insurance industry is being able to estimate risk and possibly payouts. A black swan event makes this very difficult if not impossible. At the same time, we know black swan events are possible – even if we do not know which ones might occur or what new phenomena might arise – so having money available to address the situation seems wise.

It would be interesting to see how this plays in the court of public opinion. When crisis hits, I would guess many people want governments and large corporations to be able to respond quickly and dispatch needed monies. Yet, having a large slush fund or unlimited monies to address potential situations could strike some as problematic.

Providing a fully designed and furnished home

The CEO of Restoration Hardware recently discussed providing customers with homes that are completely designed and furnished:

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I would ask everybody in this call, if you get a second tonight, go on Zillow, go on Redfin, go on, pick your website for real estate. Go look at 100 homes tonight in a price range that you think we might play at. And tell me how many have great architecture, tell me how many have great interior design and how many have great landscape architecture. If it’s 1% — if it’s more than 1%, like you must live in a really great area. But even in the great areas, it’s so low. How many friends’ houses do you go to that you say, “Wow, this is beautiful architecture. This is great interior design. This is great landscape architecture”? Almost never. Almost never. It’s like a completed — completely uncharted world.

When you really look at the big homebuilders, they’re kind of stamping out some — it’s not a McMansion anymore. Call it whatever you want. But it’s a stamp out, right? And it’s a nice organized development, but there’s no one providing completely turnkey homes. Like Eri says to me a lot, like they don’t sell you a car without an interior. You don’t go buy a beautiful Mercedes or whatever brand you like, and it comes without an interior and you got to figure it out yourself.

I don’t know how many people on this phone have tried to do their own interior design or furnished their house. It’s a nightmare. It’s a nightmare for me, and I do it for a living. I have a house in the Napa Valley that I finished remodeling like 3.5 years ago. It’s not furnished yet. It’s that hard. It’s a pain in the ass. And so we know how hard it is. We know we’re good at it….

And I sit here and I go, well, why can’t we — we’re really good at architecture, really good at interior design, really good at landscape architecture. I know we can design and build things and furnishing that people will like. And I think there’s — if you think about people with money, okay, and you think about just what’s the most valuable asset, time, right? By far, the most valuable asset. Everybody on this phone can figure out — if you lose your money, you can figure out how to make more money. If you lose your time, you just can’t get it back, right? So we think a lot about businesses that deliver time value will become more valuable.

Four things stand out to me here:

  1. It is interesting to consider this in light of the increasing emphasis on staging properties. With staging, the design is more temporary but it gives potential buyers a vision for what the property could be. The option discussed above is more long-term.
  2. Generally, Americans act as though homes should be empty boxes filled in by owners to fit their tastes. When people buy homes, they customize them (within the confines of what is possible with the home) to what they desire and what they can afford. What if it could also work the other way around: a fully designed home shapes the owner as they come to grow into it?
  3. This highlights the mass produced nature of many American homes, whether they are McMansions are not. Particularly after World War Two, larger homebuilders started constructing more homes and buyers purchased them more like factory items. Straddling this gap from mass produced home to more customized home is not easy.
  4. I think he is right that there is a market for such homes. Yet, I imagine the market is fairly small given the price that would be involved. It is one thing to stage a home and then take those items back out; it is another to have a fully immersive design process and keep everything. For a business, I wonder what is the lower price point of homes that this makes sense for businesses (particularly if this is meant of more of a luxury product that is supposed to remain exclusive).

 

The top US cities for Fortune 500 company headquarters, COVID-19 edition

In an article about working remotely, the Wall Street Journal included this graphic about the locations of the headquarters of Fortune 500 companies:

Fortune500HQLocations

This is an interesting topic to raise as more workers are laboring away from the office. What will happen to headquarters?

One option would be that headquarters remain even as organizational workforces scatter. There will always be a need to at least occasionally hold meetings or access resources or project a presence in a major city. Cities would like this as headquarters are a status symbol.

Another option is that headquarters move to locations more central to their workers or more attractive for workers. This is more unlikely but the same factors pushing workers away from major cities – high housing costs, traffic and congestion, density with threats of pandemics – could affect headquarters as well. It could be a big strategic move to follow workers to a city not on the list above.

The effects of either could be big for cities. Consider New York. It is the clear leader in terms of headquarters, it is a leading global city, and it is not just a center for business but also for news, entertainment, the arts, and other spheres. Even if the headquarters stay, the loss of high-status employees hurts. If the headquarters leave or become shells of themselves, there could be a loss of status.

When America’s unofficial third place closes 400 locations

If Starbucks is an important third place for Americans to gather and interact, what happens when the company closes 400 stores because of COVID-19 and to focus more on drive-through and carry-out business?

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Starbucks announced on Wednesday that it will close 400 of its roughly 10,000 locations in the U.S. and Canada over the next 18 months as the company projects to lose up to $3.2 billion in sales this quarter due to the ongoing coronavirus pandemic. It’s not exactly a retrenchment. The company plans to end this year with 300 more stores than when it started, even accounting for the closures—but that’s half of what the chain had originally been planning. About 40 to 50 of the new locations will only offer pickup or drive-through.

Starbucks typically closes about 100 stores every year due to leases expiring and market conditions. The decision to up that number signals that Starbucks expects the recovery from the current recession to extend far into the new year. The company did not list which locations it plans to shutter, though it did say that they would be in “high-social gathering locations” like campuses and malls. Shares for the company fell by 4 percent in midday trading as the news broke. “As we navigate through the COVID-19 crisis, we are accelerating our store transformation plans to address the realities of the current situation, while still providing a safe, familiar and convenient experience for our customers,” Starbucks CEO Kevin Johnson said in a press release.

While nearly all of the company’s cafés have reopened in limited capacities without in-store seating, the twin health and economic crises continue to discourage consumers from spending and venturing out to public spaces. The shock to Starbuck’s business model has reportedly accelerated its shift to focusing on takeaway service, which it had already been planning to do before the pandemic. In November, the company opened its first Starbucks Pickup store at Penn Plaza in New York City, where customers order and pay through their phones. While Starbucks locations have long served as a “third place” where people could meet and relax, customers in recent years have been placing more and more orders for takeout, perhaps due to the company’s recent focus on mobile ordering. The company estimates that 80 percent of its orders at company-owned stores in the U.S. are to-go. Now that the virus has made people even less likely to dawdle at cafés for an extended period of time, Starbucks expects that percentage to rise.

The new stores will emphasize the use of Starbucks’ ordering app, Uber Eats, walk-up windows, and curbside pickup to facilitate social distancing. Some store layouts will also begin including pickup counters that exclusively cater to mobile orders and food delivery services. The company hopes that large U.S. cities will eventually host a mix of cafés and pickup locations that are located within walking distance of one another in order to reduce crowding.

For a long time, the presence of a Starbucks has denoted a particular status for an area or community. Will the loss of a Starbucks or even the shift from a place one can sit and gather to one that sends food and drinks out the doors and windows harm communities?

Even without COVID-19, this hints at the limited public realm Americans have where fast-food places are some of the popular places people can or will gather. Starbucks presented this possibility though as a private business they still aim to make money and will restrict certain behavior. As the article notes, this shift may have already been underway; I noted the busy Starbucks drive-through early this year on a rare work session at a local store.